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Eco-Efficiency:
HCA

HCA’s “Reach the Peak” energy challenge for employees at acute care hospitals reduced greenhouse gas emissions by approximately 1,650 metric tons and enterprise-wide energy costs by approximately $1.36 million in the fourth quarter of 2015.

All data and information in this case study are as of December 31, 2015, unless otherwise noted.

Challenge

The health care sector ranks as the second largest commercial energy user after the food service industry in the United States.i The EPA’s ENERGY STAR program estimates that hospitals spend approximately 1 to 3 percent of their operating budgets, or $8.8 billion, on energy consumption annually.ii Energy efficiency initiatives can decrease hospital energy use and associated financial costs, as well as greenhouse gas emissions.

HCA is a leading provider of health care services, with hospitals and freestanding surgery centers in England and 20 states in the United States. HCA has been focusing on improving energy efficiency in its hospital facilities for a number of years.

Response

In 2015, HCA FacilitiGroup’s Energy Service Center focused on reducing facility energy consumption and costs through related analysis, procurement practices, conservation recommendations, audits, and other services. The Energy Service Center is integrated with nearly 60 percent of all acute care facility building automation systems and focuses on three core initiatives to drive energy performance improvements and create action plans to improve energy efficiency: EnergiScript, building automation systems integration, and real-time metering. In 2015, HCA continued expanding each of these initiatives.

EnergiScript: This web-based tool provides facility-specific utility use history to help facility managers identify trends that signal a need to look for billing errors or equipment issues, and benchmark information related to all HCA facilities to enable comparison. All of HCA’s acute care facilities and many HCA and Parallon service offices currently utilize the EnergiScript portal.

Building Automation System Integration: This tool is used to monitor and control central plant operations, including the cooling, heating, and electrical distribution systems required to support the operations of each facility. Where Energy Service Center personnel have access, they can quickly identify issues and notify the facility of the need to take action, as well as prevent similar operational issues from occurring at other HCA facilities.

Real-Time Metering Project: Certain facilities have the ability to monitor their utility usage and building automation system in real-time and thus can immediately make adjustments to reduce energy consumption. Utility bills are represented in a clear and navigable format.

In addition to this work, HCA initiated a “Reach the Peak Energy Challenge” in October 2015 to inspire action at the facility level. The challenge is an employee engagement program aimed at reducing acute care hospitals’ energy use index by 6 percent over 12 months using easy-to-implement low-or no-cost behavioral and operational changes. Each month, employees at participating facilities focus on saving energy in one area (e.g., electrical system) by adopting specific actions described in a brief video produced by FacilitiGroup.

Resultsiii

Enterprise-wide data from building automation system integration and real-time metering are not yet available due to connections for many facilities being established in 2015. Results for this are anticipated in 2017. Preliminary “Reach the Peak” results from October to December 2015 are favorable, with greenhouse gas emissions reduced by approximately 1,650 metric tons of CO2 and enterprise-wide energy costs reduced by approximately $1.36 million according to company estimates. Final results are anticipated in 2017.

Looking Forward

As it works to enhance its program, HCA is building on what is already in process and adding functionality. Throughout 2016 and 2017, HCA will maintain its focus on facility energy efficiency and is considering or implementing additional improvements, including:

Continuing work on the building automation system. The Energy Service Center is unifying all systems with standard graphics, navigation, and object naming across all vendors. The Energy Service Center is using this upgrade to bring all standard equipment in line with HCA FacilitiGroup’s guidelines of operation, which will increase efficiency and eliminate programming issues accumulated through years of projects and maintenance.

Expanding real-time metering to more than a third of all acute care facilities by the end of 2016.

Exploring how new technologies may augment intelligent building analytics for both predictive and improved situational control of building systems to obtain peak performance.

Continuing the “Reach the Peak Energy Challenge” through October 2016 with final results anticipated in 2017.

HCA began participating in KKR’s green program in 2009 and is communicating results for the fifth time. HCA has an active Sustainability Steering Committee that established the company’s guiding Environmental Principles and sustainability strategy and is continuing to pursue opportunities in additional KEPAs, including waste reduction and water use. For more information on HCA’s efforts, visit its Better Communities website.

iii Self-reported portfolio company data is not calculated, reviewed or independently verified by KKR or KKR Capstone. For more information regarding the results methodology for companies evaluating their own data, please see the methodology section. There is no guarantee that any GSP-related avoided costs or added efficiencies will positively impact the portfolio company’s valuation or performance.

Unless otherwise noted, portfolio company data represents 2015 results, published in August 2016. These case studies may contain forward looking statements including descriptions of planned projects and projected results and savings. These statements are subject to the risk that the projects will not develop as planned or at all or that projected results and savings are not realized.